Gold hovered close to its highest level in six weeks on Monday, lifted by a weakening U.S. dollar and growing conviction that the Federal Reserve could lower interest rates at its upcoming meeting.

Spot gold edged up 0.2% to $4,240.55 an ounce at 02:32 ET (06:32 GMT), after briefly touching $4,256.2 earlier in the session. February gold futures in the U.S. advanced 0.5% to $4,274.55.

Last week, bullion rallied more than 4%.

Dollar slide, Fed outlook underpin gold

The U.S. Dollar Index fell to a two-week low, making gold more affordable for overseas buyers. Broader risk aversion in financial markets also contributed to steady safe-haven demand.

Market pricing now suggests an 87% chance that the Fed will deliver a 25-basis-point rate cut in December. That expectation has been supported by weaker U.S. data and signs that inflation continues to cool.

Even so, investors remain cautious. The extended government shutdown has reduced the flow of official economic data, and remarks from Fed officials in recent days have offered mixed signals about the timing and scale of future policy easing.

Politics also entered the picture after U.S. President Donald Trump said on Sunday that he already knows who he intends to nominate as the next Federal Reserve Chair—though he declined to name the individual.

His comments reignited speculation around potential candidates such as Kevin Hassett, former Fed Governor Kevin Warsh, and current Governor Christopher Waller, any of whom could influence expectations for 2026 rate cuts.

Against this backdrop, gold has continued to attract defensive inflows, with investors seeking shelter from volatility in both equity and currency markets.

Silver hits new all-time high; copper trades flat

Precious and industrial metals posted mixed movements on Monday.

Silver futures increased 0.4% to $56.65 per ounce after hitting a record $57.815. Platinum futures rose 0.7% to $1,700.60.

Copper was steady, with benchmark LME futures unchanged at $11,207.20 a ton and U.S. copper futures flat at $5.30 a pound.

Fresh PMI readings from China showed factory activity contracting for an eighth straight month, underscoring persistent weakness in both domestic demand and export orders.

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